The objective of this work is to develop an analytical framework for the investigation of the innovative process and the measurement of technological change based on the growth of low density polyethylene (ldPE). This provides the base for the consideration of growth models incorporating the effects of technological change. As a background to the work, other studies on innovation and technological change are reviewed including the contribution of technology to the growth of the firm and the economy. The factors affecting and generating innovation leading to technological progress and expansion of ldPE in the U. K. are discussed. Interaction of many variables and the technological developments across a wide range of firms and industries have contributed to the high growth rate. Areas of particular importance that are discussed are petrochemicals, polymerisation, processing, printing and control equipment. Using the data and information collected in reviewing the technical and commercial developments of ldPE, methods of measuring technological change are investigated. Production, cost and demand functions are used, as well as the analysis of the activity of patents and scientific publications. The construction of growth models for ldPE taking into account the innovative process and technological change are considered. These are based on the analysis of supply and the changing effects of demand over time. Finally, consideration is given to the extension of this work in developing short and long term forecasting models incorporating the effects of technological change.